Holiday Pay And Overtime

A recent tribunal has concluded that holiday pay should be adjusted to reflect what the employee would ordinarily earn, even if this includes overtime. This will no doubt be appealed so a final resolution is likely to be years away.

A triumph for reason and justice or another nail in the coffin of many struggling small businesses?

I personally think that it is a fair conclusion, if your business only continues because your employees are regularly working overtime this is simply because you are not employing enough people for the work you undertake:

"Zero Hours contracts-lite" if you will

Depends on whether the overtime is official or not.

If you're in the business of renting your brain out as a timeshare (many of us are in that category) then employers always take the píss.

Kingdom come you beat me to this thread. MODS CAN CLOSE MINE

Okay following this initial judgemet from the Employment Appeal Tribunal. both sides have leave to Appeal to the Court Of Appeal

This ruling is likely to cost frims public and private sector millions of pounds given that ruling that non guaranteed overtime and shift alowances etc should now be included in the calculation of pay.

I have the 48 page EAT to read this evening with a glass or two of wine.

the impact of this ruling will be costly to the public sector as claims may go back a minimum of 5 years, Its not so much the those who are full time but it will benefit all those part time staff who do etc hours at plain time.

I don't think the EAT really understand what they have done... voluntary overtime is exactly that, and is paid at a premium rate,

The impact is that Employers may now stop overtime, meaning a lot of people will lose a significant proportion of their pay packet.

Overtime has always been an voluntary option, not a right. Unless it was contractual then I can see this initial ruling causimg all sorts of problems . ultimately the poor employee will suffer as jobs or cut or overtime is drastically reduced. Those that will really benefit from this ruling will be the lawyers

What are your thoughts on this .

In this time of austerity this ruling is likely to lead to more job losses in the public sector alone

Depends on whether the overtime is official or not.

 

If you're in the business of renting your brain out as a timeshare (many of us are in that category) then employers always take the píss.

The devil is in the detail of course, but would "renting your brain out" not be more self-employment / contract work instead of being an employee?

Pap its all overtime including non guaranteed overtime

not just contractual

I don't see the problem with holiday pay being at the same rate as average weekly pay. It shouldn't be backdated though, its not right to hit retrospectively based on a decision today.

Kingdom come you beat me to this thread. MODS CAN CLOSE MINE

 

Okay following this initial judgemet from the Employment Appeal Tribunal. both sides have leave to Appeal to the Court Of Appeal

 

This ruling is likely to cost frims public and private sector millions of pounds given that ruling that non guaranteed overtime and shift alowances etc should now be included in the calculation of pay.

 

I have the 48 page EAT to read this evening with a glass or two of wine.

 

the impact of this ruling will be costly to the public sector as claims may go back a minimum of 5 years, Its not so much the those who are full time but it will benefit all those part time staff who do etc hours at plain time.

 

I don't think the EAT really understand what they have done... voluntary overtime is exactly that, and is paid at a premium rate,

The impact is that Employers may now stop overtime, meaning a lot of people will lose a significant proportion of their pay packet.

 

Overtime has always been an voluntary option, not a right. Unless it was contractual then I can see this initial ruling causimg all sorts of problems . ultimately the poor employee will suffer as jobs or cut or overtime is drastically reduced. Those that will really benefit from this ruling will be the lawyers

 

What are your thoughts on this .

 

In this time of austerity this ruling is likely to lead to more job losses in the public sector alone

I agree with a lot of what you've said, the impact is likely to be huge - a number of businesses may well fall. What we need to do though is judge the principle first to reach a conclusion and then fathom out the impact. We shouldn't be looking to curtail rights because it would be too difficult to grant them.

As far as I am aware (I must confess I haven't read a huge amount of detail) the conclusion is that if the employee could expect to have earned overtime during the holiday period they should be paid this. The obvious conclusion is that if a claim is for occasional overtime here and there then it will fail. It should only be where the overtime is so often that they would expect to have worked it. Overtime isn't always at a premium rate.

As for most benefit going to lawyers...

The devil is in the detail of course, but would "renting your brain out" not be more self-employment / contract work instead of being an employee?

Nope, I'm simply referring to the fact that if you sell "time" and time only, people will take the píss in ways that they would not if for example, you sold something tangible.

Pap its all overtime including non guaranteed overtime

 

not just contractual

Not sure you're getting my point. There is good overtime and bad overtime.

Good overtime is when you get paid for it.

Bad overtime is when you're expected to work for free and that time is not tracked.

I don't see the problem with holiday pay being at the same rate as average weekly pay. It shouldn't be backdated though, its not right to hit retrospectively based on a decision today.

A very good point, I think the retrospective aspect is entirely without merit and definitely the part that is going to cause most issue.

Haven't really looked into this so I'm speaking from a position of relative ignorance but it looks fair on face value. I seem to recall the CBI and their ilk predicting small business closures and unemployment rises when the minimum wage was introduced and that didn't happen. At a time when wages have been hit hard and aren't increasing despite economic growth I'd say anything like this should be welcomed.

Haven't really looked into this so I'm speaking from a position of relative ignorance but it looks fair on face value. I seem to recall the CBI and their ilk predicting small business closures and unemployment rises when the minimum wage was introduced and that didn't happen. At a time when wages have been hit hard and aren't increasing despite economic growth I'd say anything like this should be welcomed.

We probably come at this from different angles but it's quite often small business owners that put their own financial security on the line to provide jobs for others. We are emerging from some very tough times and when we are seeing real recovery and many small businesses are starting to pick up again to hit them with retrospective holiday payment claims seems a bit OTT to me. In principal the rule seems fair going forward, it can be planned for. It's all a bit turkeys and Christmas if you ask me.

I believe this to be a fair ruling. As i understand the retrospective claims can only be for 3 months. It was not just about overtime, paid travelling time was also included. Employees seem to have been using overtime and travelling time as way of paying a fair rate for the job but using it to reduce their costs when staff are on their legally entitled paid leave, if the Union rep is to be believed, they were saving up to half of the going rate for the job.

What's overtime anyway? Does anyone actually receive that?

My contract is for 35 hours a week (which is actually quite low in my opinion) and I get 30 days holiday with the option to buy or sell up to 5 days. I don't think I've done a 35 hour week yet - I just do what's required of me to get the job done.

What's overtime anyway? Does anyone actually receive that?

My contract is for 35 hours a week (which is actually quite low in my opinion) and I get 30 days holiday with the option to buy or sell up to 5 days. I don't think I've done a 35 hour week yet - I just do what's required of me to get the job done.

Depends. Plenty of manufacturing jobs around here have mandatory overtime.

Depends. Plenty of manufacturing jobs around here have mandatory overtime.

Ah good point, yes, I'm just used to my office view of working where asking for overtime would be laughed at

I believe commission payments are next.

Backdating this ruling will put my company out of business at a stroke, however, if the ruling is confirmed, and say forward dated, then we can plan for it and rewrite contracts.

On the other hand, it may be the straw that breaks the camels back.

The daft thing about this is for genuine over time you now have to pay it to someone when they are on holiday, but you still have to pay someone else to do the actual work.

Pap

I see where you are coming from re Bad overtime is when you're expected to work for free and that time is not tracked

I work very long hours as it is expected of me and im of a grade that is excluded from OT (just)

Moonraker Im not sure aabout the 3 months , One part of the ruling suggests that is indeed the case, but another part is clearly intimating there has been an unlawful deduction of wages. In which case the rtrospective laws allow you to go back 5years in scotland and longer in England

I have the EAT ruling an will read the case papers in more detail I note it was only The Hon Justice Langstaff who heard thhis sitting alone

not unusual but with such a judgement you would have thought he would have had a couple of his colleagues sitting in with him.

This has a fair way to to run and the purpose of the EAT is to see if the ET has erred in Law hence the reason it has been sent back to the Original ET.

Eventually both sides have been given the right to apeal his comment to the Court of Apeal , which will be some time in the far future.

Watch this space.

CB spot on

There are worse abuses of sick pay in the public sector going on which make Holiday back pay for OT seem like lose change in your pocket

VW I look forward to your learned brief! I do agree that backdating 5 years would be very damaging so I hope it is not allowed.

I heard one news report of going back 16 years but records only have to be kept for 6 and that the administration costs alone could cause severe financial problems for companies, glad I'm near retirement.

A recent tribunal has concluded that holiday pay should be adjusted to reflect what the employee would ordinarily earn, even if this includes overtime. This will no doubt be appealed so a final resolution is likely to be years away.

 

A triumph for reason and justice or another nail in the coffin of many struggling small businesses?

 

I personally think that it is a fair conclusion, if your business only continues because your employees are regularly working overtime this is simply because you are not employing enough people for the work you undertake:

"Zero Hours contracts-lite" if you will

Sour mash

Most contracts do specify such terms . Justice Langstaff is an interesting judge by the way . We need The Lord denning and the key principles of the man on the clapham bus jurisdiction reintroduced to employment law .

There have been some odd decisions in recent years . Where would you like me to start .

What's overtime anyway? Does anyone actually receive that?

My contract is for 35 hours a week (which is actually quite low in my opinion) and I get 30 days holiday with the option to buy or sell up to 5 days. I don't think I've done a 35 hour week yet - I just do what's required of me to get the job done.

Maybe one day you'll be trusted enough to be given stuff that will fill your entire 7 hour workday.

CB

Yes Commision based holiday pay is accepted now following a landmark ruling earlier this year by the Cort of Justice European Union

in the landmark case of

British Gas V salesman Mr Z Lock case.

This was the case that opened the flood gates for yesterdays ruling

I will sumarise yesterdays case later.

Maybe one day you'll be trusted enough to be given stuff that will fill your entire 7 hour workday.

Eh?